Financial Crime… To catch a thief
To catch a thief…
To begin this post “To catch a thief,”, I submit that I am not a criminal investigator. I have 30 years plus experience in insurance investigation work, including pre-trial investigations, accident reconstruction, and investigation and settlement of high dollar first party and third party claims, typically representing the insurance company. My background also includes investigations on behalf of city and county municipalities, including bodily injury and property damage claiming negligence of other parties involved.
In 2008-2010, my wife and I lost several hundred thousand dollars that we had invested in the Principal U.S. Property Separate Account (PUSPSA), offered as a separate account option by Principal Life Insurance Company. Years later, following a lawsuit filed on behalf of 89 individual plaintiffs, Principal offered a settlement of 20% of our damages included in a $5 million aggregate settlement.
None of the plaintiffs were informed of the individual offers nor the attorneys fees paid, as required by the American Bar Association under an aggregate settlement, and the offer matched to the penny, $5,000,000.00, the maximum dollar limit that could be offered under such a settlement. The plaintiff’s attorney tried to convince us this offer was a good faith settlement offer. We refused the offer, our attorney withdrew representation of our case, and within a short time the Statute of Limitations expired, barring us from any further options to pursue a fair settlement. At the same time, the presiding Iowa Southern District Court Judge refused to certify the class, and several hundred thousand investors lost the opportunity to recover even 20% of their legitimate damages.
When the PUSPSA was originally frozen in 2008, and all investors were restricted from access to their retirement plan assets, even those that had retired and were still working as in our case, the Department of Labor in Kansas City, Missouri opened their own investigation of this matter. DOL Chief Investigator Joe Nelson handled the matter, and for a short time, there was an exchange of information between myself and Mr. Nelson. Four years later, still failing to take action, Mr. Nelson closed his investigation.
During this time, I began to gather information to determine if Principal’s allegations regarding the PUSPSA were truthful representations. It wasn’t long before I was being stonewalled by federal agencies. The Form 5500 schedules, supposedly filed with the DOL, had been purged for the years 2006, 2007, and 2008. Meetings held by CEO Larry Zimpleman and his CCO and CFO with the Securities and Exchange Commission were not documented with minutes. The SEC reported they could find no records of such meetings, documented on then SEC Chairman Mary Schipiro’s appointment calendar for February, 2010.
I was later able to obtain the Form 5500 schedules in an encrypted form, but the schedules listing all alleged plan sponsors for those years were scrambled and unusable. After weeks of un-encrypting and alphabetizing the thousands of plan sponsor names, I was able to create spreadsheets that clearly show the reports were fraudulently filed with the DOL. Names listed for 2008, in many cases, were not clients of Principal for that time period even though Principal reported them as such, and in 2006 and 2007, there were thousands of missing client names, grossly understating the actual number of plan sponsors doing business with Principal.
These facts began to bring together conclusions for fraudulent behavior by Principal. Hundreds of millions of dollars were missing from the schedules for 2006 and 2007. The number of clients reported in 2008 were so grossly over stated that the schedules reported an average negative contribution for 2008, which would have been impossible considering an increase in contributors in the thousands of individuals.
It was easy to conclude that billions of dollars was missing from the Principal U.S. Property Separate Account, extracted in 2006, 2007,and 2008. This time period coincided with Larry Zimpleman’s tenure as president and CEO of the company, and it wasn’t long thereafter that I uncovered the likely possibility that at least 43 corporate individuals had engaged in a money laundering scheme through a bank in Maryland, using an IP address owned by a nearby large Iowa corporation, the CEO of which also happened to be on the Board of Directors with Principal.
So the 401(k) separate account was frozen because it had no monetary value to meet the expected withdrawal requests during the financial crisis in 2008 and 2009. But where did billions of dollars disappear to during those three years that Zimpleman and his collaborators stole the money from investors? The remaining years I have engaged an extensive curation of the internet, researching county recorder’s offices across the country, finding mortgage deeds in which the PUSPSA assumed hundreds of millions in mortgages held by Principal as lender, defaulted loans they had engaged as equity partners and which they could not foreclose. Billions more were spent by co-investors, primarily the Trammel Crow Company (TCC) from Texas, in which TCC had developed office buildings while Principal was an equity partner.
Finally, Principal engaged the PUSPSA as a loan guarantor with banking institutions when highly leveraged borrowing was restricted, which enabled Principal and their co-partners to continue new construction on high risk projects. In most cases, these loans were defaulted by design within 24 months, after which the existing loan and all added fees were paid by the PUSPSA. Once owned by the separate account, these heavily mortgaged properties were devalued to their expected “fair value,” in many cases losing tens of millions of dollars within a few weeks of the loan being purchased by the account.
Principal has successfully avoided any form of investigation by a federal or state agency. The Department of Labor has failed to take any form of investigation to the U.S. Department of Justice, and during the Obama administration, CEO Zimpleman’s son was employed by the U.S. Department of Justice to investigate corporate crimes such as brought on by his own father. It is likely Attorney Zimpleman was hired under the alleged “pay to play” scheme initiated while Hillary Clinton was Secretary of State.
All of which brings me to 2018. I have been investigating this matter since 2009, almost a decade ago, and have compiled thousands of documents, many of which support my conclusions, accusations, and allegations that Principal criminally extracted billions of dollars from investor’s accounts during the three years in question. I have been publicly reporting my findings in www.fiduciaryfactor.com, and my blog posts.
My goal for 2018 is to bring this matter to an end. With a new administration, Larry Zimpleman is out of his comfort zone. His son no longer works for the U.S. Department of Justice, and Larry Zimpleman himself is no longer affiliated with the Principal Group of Companies. Many of the accomplices in this caper continue to work for Principal as board members and high level executives like Karen Shaff and Dan Houston. I believe CFO Terry Lillis has also retired in 2017. Since I was a resident of Missouri during the time of this crime, I will most likely refer this matter to the Missouri State Attorney to review. I also have not yet given up on the U.S. Department of Justice.
Many of my thousands of readers had money in the PUSPSA fund also, and if you are among those impacted, forward my commentaries to your own State Attorneys’ office for review. Meanwhile, I will also continue to do my blog posts when warranted or when new information is uncovered. This has been rewarding in many ways for this writer, not the least of which is having a voice of truth in a very corrupt world.
Dennis Myhre, AIC